Equifax Clients Settle Misrepresentation Suits

PHILADELPHIA (CN) – Credit-rating giant Equifax will revise the letters it sends to consumers who dispute the accuracy of their credit reports, under a class-action settlement approved by a federal judge.

The company must also provide the class, estimated to exceed 42,000 consumers in Pennsylvania, New Jersey and Virginia, with complimentary credit-monitoring services for 18 months, worth about $13 million, court records show. Three suits filed between 2007 and 2010 accused the company of misrepresenting the methods it uses to confirm the accuracy of credit-report items disputed by consumers. The suits, which included two class actions, were filed in Pennsylvania, New Jersey and Virginia, and were consolidated in Pennsylvania’s Eastern District in October 2010. The New Jersey class action claimed Equifax violated the Fair Credit Reporting Act by sending letters that falsely told consumers that it confirms the veracity of disputed public-record information by contacting the source – a county court, in this instance – directly. In reality, however, Equifax never directly contacts the public-information sources, and uses a third-party company to investigate the disputed information, the suit claimed. “In response to a consumer’s dispute regarding the accuracy of a public record, it [Equifax] never contacts the original source of the information, but rather contacts the private independent company that it never discloses to the consumer,” according to the suit. Under a settlement agreement given final approval by U.S. District Judge Anita Brody Wednesday, “Equifax will not represent that the government and/or any court or courthouse is a furnisher of information in response to a consumer’s dispute”; “will not represent that the government and/or any court or courthouse was contacted ‘directly’ by Equifax in connection with any consumer’s dispute”; and “will not represent that the government and/or any court or courthouse actually investigated a consumer’s dispute.” Lead class counsel will receive over $1 million, and the three class representatives will receive $15,000 apiece, according to the terms of the settlement.